ot unlike most other industries, the dairy industry has suffered
during the economic downturn with an increasing number
of consumers choosing products according to price rather
than quality or brand. Budget products fill up supermarket shelves,
offering a low-cost alternative to the starved consumer.
Not surprisingly, the crisis has also affected the global dairy company
Arla Foods which has seen a clear change in consumer behaviour.
Studies show that 40 per cent of all Danish consumers don’t have a
preference for a particular dairy brand. They buy whatever is on the
shelves, with price rather than quality and taste driving their purchasing
decision. Not to mention the fact that dairy suppliers seem to have
been lulled into a false sense of security, having neglected for some
time to develop tasty premium products of higher quality.
“Many consumers have stopped making engaged decisions when they
shop for groceries – they choose the cheapest alternative which eventually will devaluate the quality of dairy products. Similarly, the dairy
industry has not assumed responsibility for driving and exploiting the
opportunities of developing products that appeal to those looking for
quality and taste. At Arla Foods, we cannot just stand by and watch this
happen. That’s why we’ve launched a new strategy with the purpose of

PASSION-FOR-DAIRY INITIATIVES
Unika gourmet cheeses

Arla Foods flagship store

Vending machines with dairy products

A selection of eight unique gourmet cheeses

In April 2012, Arla opened a small flagship

The first vending machine is already installed

based on traditional cheese-making tech-

store in Torvehallerne in Copenhagen, making

at the Zoo in Copenhagen and more are

niques, matured for many years and

the exclusive Unika cheese line available for

to follow, especially in schools to ensure a

sold exclusively to restaurants and in

consumers for the first time.

healthier alternative to the kids’ lunch pack.

specialty shops.

reinstating passion for dairy among consumers
and employees, driving the development of
each category starting from the top and supplying innovative premium products. We need
to rebuild a culture of pride and passion for
every single dairy product we make. Coffee is
a great example that such a change is possible:
20 years ago, the selection was limited to a few
brands and the interest was minor; today there
are a myriad of choices, and consumers have
a clear position regarding their favourite type
of coffee roast, aroma, flavour or even which
blend they prefer,” Peter Giørtz-Carlsen, CEO
of Arla Foods Denmark, explains.

A

s one of the largest producers of dairy
products in the Nordic countries,
Arla Foods’ role is to ensure diversity
and innovation within their product categories
while leading the way in an international environment with increasingly fierce competition.
Arla Foods’ strategy is therefore threefold with
a simultaneous ambition to drive high-end innovation and quality, to develop new exciting
dairy consumption occasions in the mainstream segment and to continuously remain
cost-competitive compared to international
competition.

“

Our obligations are many at Arla Foods.
We need to be able to offer a cost sensitive
alternative through efficient mass production and at the same time develop interesting
premium products for the more conscientious
consumers. But more importantly, we need
to ensure that we don’t end up with a market
for dairy, as seen in many other countries,
with a rather limited product offering within
each category, primarily dominated by budget
products. We need to ignite passion, beginning with the premium segments, which will
eventually create a ripple effect throughout all
products and price segments, ensuring choice,
quality and value for all,” Peter underlines.
Another interesting trend involving consumer behaviour and preferences for more
premium products is the increasing interest
in the Nordic kitchen that combines a greater
focus on gourmet quality with the use of local
everyday products. This is clearly an open

invitation for dairy producers such as Arla
Foods to be at the forefront of innovation,
diversity and category development.
Arla Foods will begin the transformation from
within. “Before we can expect passion for dairy
among consumers, we must ‘live’ the passion
among ourselves. To make this happen, we’ve
involved all employees in the strategy and
implementation process. We all need to take
ownership, and the management team must
work on breaking down barriers that hinder
passion in flourishing,” Peter explains.

A

s part of the process, Arla Foods
is working on streamlining their
product portfolio as well as on developing new products and using new channels to expand the market, thus creating new
consumption occasions. An example of this
is the installation of 800 coolers and vending machines in Danish schools and other
similar places to offer a healthy ”on-the-go”
alternative. Offering dairy products in vending
machines is quite unusual in Denmark; it
may, however, create new dairy consumption
occasions in the future.

A
rla Foods will begin the
transformation from

within. “Before we can

expect passion for dairy
among consumers, we
must ‘live’ the passion
among ourselves”.